Folse v. ACE American Insurance Company, Inc. et al
Filing
14
ORDER AND REASONS granting 5 Motion to Remand and pursuant to 28 U.S.C. § 1447(c), this matter is REMANDED to the proper civil district court in Louisiana. Signed by Judge Martin L.C. Feldman on 12/7/16. (clc)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DANIEL JOSEPH FOLSE
CIVIL ACTION
V.
NO. 16-15635
ACE AMERICAN INSURANCE CO.,
UNITED RENTALS NORTH AMERICA, INC.,
CEDRIC JACKSON, AND PROGRESSIVE
CASUALTY INSURANCE COMPANY
SECTION "F"
ORDER AND REASONS
Before the Court is the plaintiff’s motion to remand the case
to state court. For the following reasons, the motion is GRANTED.
Background
On September 1, 2016, the plaintiff filed a suit for damages
in the Civil District Court for the Parish of Orleans. The lawsuit
arose from a motor vehicle accident, which occurred on September
4, 2015 in Jefferson Parish, Louisiana. The plaintiff, Daniel
Joseph Folse, and the defendant, Cedric D. Jackson, were the two
respective drivers of the vehicles involved in the accident.
The original petition for damages filed in state court asserts
that the plaintiff is domiciled in Orleans Parish, Louisiana.
Additionally, the petition asserts that defendant Ace American
Insurance
is
a
foreign
company
licensed
to
do
business
in
Louisiana, 1 United Rentals (North America) is a foreign corporation
1
In the notice of removal, the record indicates that Ace American
Insurance Company is domiciled in Pennsylvania and is incorporated
in a state other than Louisiana.
1
whose principal place of business is in Baton Rouge, Louisiana, 2
and finally asserts that Cedric Jackson is domiciled in Louisiana
and Progressive Casualty Insurance Company is a foreign company.
The defendant asserts in the notice of removal that the plaintiff
has not yet served process on Cedric Jackson and Progressive
Casualty Insurance Company as of the time of filing.
The defendants filed a notice of removal in this Court. The
defendants allege the removal is proper under 28 U.S.C. §§ 1332,
1441 (a) and (b) because there is complete diversity and the amount
in controversy exceeds $75,000.
The plaintiff responded to the notice with a motion to remand,
which the Court now considers. The defendants aver, in opposition,
that Cedric Jackson was improperly joined in this matter as a ploy
to
obstruct
federal
court
jurisdiction.
According
to
the
defendants, Jackson is not a proper defendant because in the
plaintiff’s original complaint the plaintiff stated that United
Rentals, as Jackson’s employer, is liable for all of Jackson’s
conduct at issue in this litigation under Louisiana’ doctrine of
vicarious liability and respondeat superior.
2
In the notice of removal, the record indicates that United Rentals
is incorporated and domiciled in Delaware and maintains its
principal place of business in Connecticut.
2
The Court must first consider whether Jackson was properly
joined in this action. If Jackson is a proper defendant, the Court
will then consider the motion to remand on its merits.
I.
It is the removing party’s burden to establish improper
joinder,
and
the
burden
is
a
“heavy
one.”
Lundquist
v.
J&J
Exterminating, Inc., No. 07-CV-1994, 2008 WL 1968339, at *2 (W.D.
La. May 2, 2008) (quoting Smallwood v. Illinois Central R.R. Co.,
385 F.3d 568, 574 (5th Cir. 2004) (en banc)). The Fifth Circuit
recognizes two ways for the removing party to establish improper
joinder: (1) “actual fraud in the pleading of jurisdictional
facts;” or (2) an “inability of the plaintiff to establish a cause
of action against the non-diverse party in state court.” Smallwood,
385 F.3d at 573 (en banc) (citing Travis v. Irby, 326 F.3d 644,
646–47 (5th Cir. 2003)). Here, there is no allegation of actual
fraud. As such, “[t]he test for improper joinder where there is no
allegation
of
actual
fraud
is
whether
the
defendant
has
demonstrated that there is no possibility of recovery by the
plaintiff against an in-state defendant.” Rodrigue v. Continental
Ins. Co., No. 14-1797, 2014 WL 4999465, at *2 (E.D. La. Oct. 7,
2014) (citing Smallwood, 385 F.3d a 573).
“In determining the validity of an allegation of improper
joinder, the district court must construe factual allegations,
resolve contested factual issues, and resolve ambiguities in the
3
controlling state law in the plaintiff’s favor.” Rodrigue, 2014 WL
4999465, at *2 (citing Burden v. Gen. Dynamics Corp., 60 F.3d 213,
216 (5th Cir. 1995)). The Fifth Circuit articulated two avenues
for determining whether a plaintiff has a reasonable basis for
recovery under state law. First, “[t]he court may conduct a Rule
12(b)(6)-type analysis, looking initially at the allegations of
the complaint to determine whether the complaint states a claim
under state law against the in-state defendant.” Smallwood, 385
F.3d at 573. “Ordinarily, if a plaintiff can survive a Rule
12(b)(6) challenge, there is no improper joinder.” Id. Second, if
the plaintiff has stated a claim, and as a result, survives a Rule
12(b)(6) challenge, but “misstated or omitted discrete facts that
would determine the propriety of joinder,” the court may “pierce
the pleadings and conduct a summary inquiry.” Id. “[A]lthough the
type of inquiry into the evidence is similar to the summary
judgment inquiry, the district court is not to apply a summary
judgment standard but rather a standard closer to the Rule 12(b)(6)
standard.” McKee v. Kansas City S. Ry. Co., 358 F.3d 329, 334 (5th
Cir. 2004). “The district court must also take into account ‘the
status of discovery’ and consider what opportunity the plaintiff
has had to develop its claims against the non-diverse defendant.”
Id.
II.
4
Jackson was an employee of United Rentals who allegedly caused
the vehicle accident and was acting in the scope of his employment.
Co-defendants, Ace American and United Rentals allege that the
plaintiff does not have a claim under Louisiana law against Cedric
Jackson. Therefore, the parties allege, Jackson was improperly
joined to defeat federal jurisdiction. The defendants urge that
Robinson v. Wal-Mart Stores, Inc. is instructive on this matter.
Civil Action No. 15-6871, 2016 WL 1572078 (E.D. La. Apr. 19, 2016).
In Robinson, the court held that a plaintiff did not have a
claim against the Wal-Mart store manager. Id. at *2. It reasoned
that for a store manager or employee to be held liable for an
injury to a third party, the manager or employee must breach an
independent, personal duty to the third party, which caused the
third party’s injury. Id. The plaintiff in the case alleged three
acts of negligence against the store manager: “(1) negligently
training the employees to properly warn of hazardous conditions;
(2) negligent supervision of the employees for which he maintained
supervision
and
control;
passageways,
aisles,
unreasonable
and
and
and
(3)
failing
to
provide
which
do
not
conditions
foreseeable
risk
and
hazard
of
safe
pose
an
injury
to
plaintiff.” Id. at *3. Therefore, the plaintiff did not allege a
personal,
independent
duty
to
store
patrons,
including
the
plaintiff. See id. “In Canter v. Koehring, the Louisiana Supreme
Court identified four distinct criteria which must be satisfied
5
before an employee can be found liable to a third party for his or
her injury:
‘(1) The principal or employer owes a duty of care
to the third person . . ., breach of which has caused
the damage for which recovery is sought;
(2) The duty is delegated by the principal or
employer to the defendant;
(3)
The defendant . . . has breached his duty
through personal (as contrasted with technical or
vicarious) fault. The breach occurs when the defendant
has failed to discharge the obligation with the degree
of care required by ordinary prudence under the same or
similar circumstances. . .; and
(4) [P]ersonal liability cannot be imposed upon the
officer, agent, or employee simply because of his
general administrative responsibility for performance of
some function of employment. He must have a personal
duty towards the injured plaintiff, breach of which
specifically caused the plaintiff’s damages.’”
Id. at *2-3 (citing Canter v. Koehring, 283 So. 2d 716, 721 (La.
1973).
In
contrast,
the
plaintiff
alleged
breaches
of
personal
duties against Jackson in the complaint filed in state court. Folse
alleged that Jackson (1) failed to keep a proper lookout; (2)
failed to steer his automobile properly, so as to avoid striking
the plaintiff; and (3) failed to apply the brakes properly on the
automobile so as to bring it to a stop before colliding with the
plaintiff’s vehicle. While the co-defendants properly point out
that the plaintiff alleges United Rentals is liable for Jackson’s
negligence under a theory of respondeat superior and/or vicarious
liability, that allegation does not preclude the plaintiff from
successfully bringing negligence claims against Jackson for a
6
breach of personal duty. See id. 3 Therefore, the Court concludes
the defendants failed to meet the “heavy burden” to establish that
Cedric Jackson was improperly joined. The Court next turns to
whether removal to this Court is precluded by of lack of complete
diversity.
III.
“To remove a case based on diversity, the diverse defendant
must
demonstrate
jurisdiction
that
all
of
the
prerequisites
contained
in
28
U.S.C.
§
1332
are
of
diversity
satisfied,”
including that the citizenship of every plaintiff is diverse from
the citizenship of every defendant. See 28 U.S.C. § 1332; Smallwood
v. Illinois Cent. R. Co., 385 F.3d 568, 572 (5th Cir. 2004).
28 U.S.C. 1332(a)(1) provides: The district courts shall have
original jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75,000, exclusive of
interest and costs, and is between citizens of different States.
Under 28 U.S.C. § 1441 (b)(2), which is titled “removal based
on diversity of citizenship,” a civil action otherwise removable
solely on the basis of the jurisdiction under section 1332(a) of
this title may not be removed if any of the parties in interest
3
At this time the Court need not consider the merits of these
negligence claims against Cedric Jackson. The mere existence of
the cause of action is enough for the Court to determine there was
no improper joinder at this point in the proceedings.
7
properly joined and served as defendants is a citizen of the state
in which such action is brought.
IV.
“Complete diversity ‘requires that all persons on one side of
the controversy be citizens of different states than all persons
on the other side.’” Harvey v. Grey Wolf Drilling Co., 542 F.3d
1077, 1079 (5th Cir. 2008) (quoting McLaughlin v. Mississippi Power
Co., 376 F.3d 344, 353 (5th Cir. 2004)). Here, the plaintiff is a
Louisiana citizen and one of the defendants, Cedric Jackson, is
also a citizen of Louisiana.
The
defendant,
in
removing
the
suit
to
federal
court,
apparently relied on the effect of non-service as to defendants
Cedric Jackson and Progressive Casualty Insurance Company. “As to
the effect of non-service on removability of a suit, the Supreme
Court stated in Pullman Co. v. Jenkins, 305 U.S. 534 (1939):
[W]here a non-separable controversy involves a resident
defendant [], the fact that the resident defendant has
not been served with process does not justify removal by
the non-resident defendant[.] [I]t may be said that the
non-resident defendant may be prejudiced because his codefendant may not be served. On the other hand there is
no diversity of citizenship and the controversy being a
non-separable one, the non-resident defendant should not
be permitted to seize an opportunity to remove the cause
before service upon the resident co-defendant is
effected.
Handy v. Owens Corning Corp., No. CIV.A. 15-755, 2015 WL 3447206,
at *2 (E.D. La. May 28, 2015) (quoting Pullman, 305 U.S. at 541)
(citations
omitted).
“Thus,
‘[t]he
8
law
is
clear
that
the
citizenship of all named defendants, whether served with process
or
not,
diversity
must
be
exists,
considered
thereby
in
determining
providing
a
whether
jurisdiction
complete
basis
for
removal . . . under 28 U.S.C. § 1441.’” Handy, 2015 WL 3447206, at
*2 (quoting Ott v. Consolidated Freightways Corp. of Delaware, 213
F. Supp. 2d 662, 664 (S.D. Miss. 2002)). To further clarify, courts
reiterate that “‘an action based on state law cannot be removed to
federal district court if any nondiverse defendant is joined in
the complaint, even if the nondiverse defendant was never served.’”
Ott, 213 F. Supp. 2d at 664 (quoting Worthy v. Schering Corp., 607
F. Supp. 653, 655 (E.D.N.Y. 1985)); see also Handy, 2015 WL
3447206, at *2. Therefore, the law is abundantly clear that a nonresident cannot seize an opportunity to remove a case to federal
court before a resident co-defendant is served.
Ultimately, when
complete diversity does not exist, the question of whether all
defendants were served is never reached. See Burke v. Humana Ins.
Co., 932 F. Supp. 274, 275-76 (M.D. Ala. 1996).
Cedric Jackson, the driver of one of the automobiles in the
accident, is a resident of Louisiana. The plaintiff is a resident
of Louisiana. Therefore, complete diversity does not exist in the
lawsuit before the Court. If there is not complete diversity, the
Court need not reach the question of service for purposes of the
9
forum defendant rule in 1441(b). 4 Additionally, the Court does not
address the merits of whether the defendant meets the burden of
proving the amount in controversy exceeds $75,000 because complete
diversity is patently absent.
Accordingly, IT IS ORDERED that the plaintiff’s motion to
remand state court is hereby GRANTED and pursuant to 28 U.S.C. §
1447(c), this matter is REMANDED to the proper civil district court
in Louisiana.
New Orleans, Louisiana, December 7, 2016
______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE
4
The forum defendant rule in § 1441(b) “does not expand removal
jurisdiction to allow removal where complete diversity exists
between all served defendants, regardless of the citizenship of
unserved defendants. On the contrary, § 1441(b) is a further
limitation on removal jurisdiction, insofar as an action in which
there exists complete diversity of citizenship is still not
removable if a defendant is a citizen of the state in which the
action was originally brought.” Zaini v. Shell Oil Co., 853 F.
Supp. 960, 963 (S.D. Tex. 1994).
10
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